Turkey is currently undergoing its second serious economic crisis since 2017, as the country’s national currency has lost approximately 30 percent of its value in the last month. The Turkish Lira has been subject to so much volatility in the last two weeks that it’s “making Bitcoin look tame by comparison,” reports Bloomberg.
“The 10-day swings in the lira relative to the U.S. dollar now exceed those for Bitcoin amid Turkey’s escalating currency crisis,” reads the report. “This phenomenon hasn’t happened since April 2017, shortly following Turkey’s constitutional referendum.”
Turkey in a Scramble
Turkish President Tayyip Erdogan has been calling for Turkish citizens to convert foreign-exchange deposits to the support the Lira in what appears to be a last ditch effort to support the crashing national currency. However, this has only seemed to bolster Turkish citizens interest in seeking alternative means of exchange.
48-year old jeweler Cahit Bas told Bloomberg that he has lost all faith in the Lira. “I’ve lost about 1 million liras,” said Bas. “I think we’re heading for a crisis even worse than the previous one.”
Bitcoin vs the Lira
Following its boom in late 2017, the world’s leading cryptocurrency has lost 55 percent of its value this year compared to 45 percent for the Lira. However, Bitcoin has still managed to hold on to considerable public support despite market downturns. Indeed, cryptocurrency expert Bart Smith told CNBC in July that Bitcoin’s 2018 downturn was something to be expected.
“We got way ahead of ourselves, when we got into late December and early January. We’ve been grinding back down here, and we’re now back at that level before Bitcoin became a financial instrument,” said Smith. “[Bitcoin] is the currency of the internet. I would say its a digital gold. Its a cross-boarder money transfer which people use. Its hard to imagine Bitcoin losing its use-cases versus the field.”
While the cryptocurrency community retains faith that the Bitcoin market will soon return, particularly if large financial institutions begin to get involved in the space, the same cannot be said for Turkish faith in the Lira.
Some Turkish lawmakers like Ahmet Kenan Tankikulu have even called for Turkey to develop its own national cryptocurrency.
“The world is advancing toward a new digital system. Turkey should create its own digital system and currency before it’s too late.”
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